Page 45 - Energize October 2022

VIEWS AND OPINION

Dispelling myths and misconceptions about

electricity resale in South Africa

by Vally Padayachee, power and energy professional

ccording to the Electricity Resellers distribution or transmission services.
Association of South Africa (ERASA) A legal entity may be an Embedded
Athe concept of reselling electricity Generator, another Distributor, an
in South Africa has been around for many end-use customer, an international
years. Several of its members have been customer, a retailer or a reseller.
reselling electricity for 20 years or more. If c) An “Embedded Generator” means
one takes into consideration bulk supplies a legal entity that operates one or
of electricity to body corporates, landlords more Unit(s) that is connected to the
and other large commercial buildings, distribution system; alternatively, a
reselling electricity goes back even further. legal entity that desires to connect
The bulk supply point platform was one or more Unit(s) to the distribution
created by municipalities wanting to system.
decrease their administrative and cost d) An “End-use customer” means a Vally Padayachee
burden due to the increasing number user of electricity connected to the
of high-density urban developments. distribution or transmission system. Obligations that the Act places
Reselling was necessary to allow property e) The following activities are also exempt on the reseller (and/or its agent)
owners, landlords and body corporates from licensing and require registration a) Resellers must take meter readings,
to use metering services to individual (according to the said sections of provide consumption data and test
consumers beyond a bulk supply point. Schedule 2 of the Act.) meters.
This article seeks to dispel some of b) A reseller must communicate to its
the myths and misconceptions about The trading of electricity by a customers regarding, for example,
electricity reselling and to provide clarity reseller in circumstances in which disconnections.
and answers to some of those myths or • The price charged by the reseller to c) A reseller must operate and maintain
misconceptions. In this respect, the author customers does not exceed the tariff its electricity networks in a manner as
has consulted with some licensed local that would have been charged to such if it were licensed, including quality of
power utilities, NERSA, SARPA, end use customers for the electricity if it had supply.
customers, legal and other professionals been purchased from the holder of d) A reseller must also note that common
in the industry or sector when arriving a distribution licence for the area in use electricity must be charged for by
at some of the aforesaid responses, which the electricity is supplied to the dividing by the number of customers.
clarifications, and so on. customer; and e) A reseller must provide emergency
• The reseller has entered into either numbers, respond to power failures
What is the legal status of a service delivery agreement in in reasonable time and must inform
electrical reselling in South accordance with the Municipal Systems its customers of the procedure for
Africa? Act, (Act No 32 of 2000) (where the reporting faults.
According to Schedule 2 of the Electricity licensed distributor is a municipality) f) A reseller must provide a licensed
Regulation Act, 2006 (Act No. 4 of 2006) or a similar agreement with the distributor (as applicable) with
(the Act) published on 12 August 2021 as a distributor (where the licensed information on customer categories
Government Gazette (No. 44989): distributor is not a municipality), that and the draft invoice (consumption and
a) A “Reseller” means a person who regulates the relationship between tariff).
purchases electricity from a trading the reseller and the holder of the g) A reseller must familiarise themselves
entity in order to sell such electricity to distribution licence and the obligations with the licensed distributor’s (in this
a customer. of the reseller in respect of the case Eskom or municipality) tariff.
b) A “Customer” means a person or quality of supply to customers; and h) Prepaid meters should comply with
legal entity that has entered into the Regulator has ratified the general prevailing applicable approved
an agreement with a Distributor terms and conditions of such service standards and receipts should show
or Transmitter for the provision of delivery agreement. the breakdown of costs.

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